Future of Rail Services

Debate between Stephen Hammond and John Penrose

Tuesday 20th December 2022 Westminster Hall

[John Penrose (Weston-super-Mare) (Con)]

My hon. Friend is making an excellent speech. I want to back up his suggestion for a much more slimline future system operator for two reasons. First, if I understand his point correctly, that would put customers and passengers right at the front rather than system and network engineers, which is the right way round and the right order of priority. Secondly, that addresses the fundamental point that my hon. Friend raised at the start that the difficulties from 2016 onwards were of an overly centralised, overly controlled agglomeration of power. He suggests a dispersal and relaxation of that power, and a transfer of it out from the centre, which is essential if we are going to have the flexible system we need to adjust to the changes that the pandemic has brought.

[Stephen Hammond]

I am tempted to say that great minds think alike, because my next point is to suggest to the Minister that the Government should look at passenger service contracts. We all accept that the post-2016 franchising system and the pandemic have meant there is a need for change, but passenger service contracts are a journey rather than an end in themselves and the Government should look at what the end might be, so I suggest two things. I suggest that we should look at evolving mechanisms, so that there is a spectrum of possibilities for either new contracts or revised franchises that look at revenue risk, how it is shared, a range of revenue incentives, and a range of arrangements that in some cases would allow slot auctions as well as new franchises and that potentially ensure passenger service contracts in some areas. To that end, a commitment to review what is now in place after two years would allow that to happen. As I say, it would also provide for greater competition by introducing slot and route auctions—initially, I suggest, for a limited number of some of the long-distance routes. It would drive passenger satisfaction, encourage initiative and secure a future for open access, which had been one of the drivers for change, and for a range of competitions.

Some really exciting recommendations in the Williams-Shapps review should be kept. They include a steady programme of electrification alongside the utilisation of enhanced battery and hydrogen technology; new procurement processes based on whole-life value, with consideration of opex and social value, not just old-style cost-benefit analysis; and the provision of open data being more accessible and available to all industry participants. Those are some of the sensible, well-thought-through suggestions, as is the need for a guiding mind, but I hope the Minister will also accept that now is the right time, as I understand that the Government are looking to bring forward new plans or even a Bill in the new year. I hope he will accept the points I have made about separating the guiding mind from the infrastructure provider, giving a commitment to revise the spectrum of possibilities for train operating companies, and giving a commitment to see the private sector work alongside the public sector to deliver a clear, identified and accountable investment programme, so that all the money that is available for investment is spent in control period 7.

I am optimistic about the future of the railways, and I am particularly optimistic about their being in my hon. Friend the Minister’s hands, so I hope that he will accept that what I am trying to do—in a very thumbnail and headline way—is to set out some ideas that I think will make the future of the railways even more secure. I hope he will accept them as positive, constructive and implementable ideas, so that we have a railway that is fit for the 21st century.